Google Pay users in the US can now send money to GPay users in India and Singapore, Google said on Tuesday, taking its first step into the wire transfer market.
The company has partnered with Western Union and Wise, both of whom have integrated their services with Google Pay. This is the first time any of the cross-border payment companies have entered into such a contract.
Josh Woodward, director of product management at Google, told TechCrunch in an interview that the company is launching its cross-border payments function with India and Singapore and plans to expand it globally by the end of the year.
“As with a number of Google products, we’re going to test, learn, and iterate, and then start scaling,” he said.
As part of the partnership, Western Union will enable cross-border payments with Google Pay in over 200 countries, while Wise – formerly known as TransferWise – will expand support in over 80 countries.
When Google Pay users in the US try to send money to someone in India or Singapore, they are notified of the exact amount the recipient will receive. The Google Pay app also allows users to choose which payment provider – Wise or Western Union – they want to use and how long it would take for the recipient to receive the money.
With the transfer function, only US users of Google Pay can currently send money to customers in India and Singapore – and not the other way around. Woodward said the company selected India and Singapore in part because they are vital in the remittance world.
India was the largest receiving country for remittances in 2019, receiving more than $ 80 billion a year, according to the World Bank. The USA is now the largest sender. Ultimately, Google intends to enable fully cross-border transfers worldwide.
Also worth mentioning: the cross-border payments are only available for person-to-person payments. (For example, companies on GPay in the US cannot send money to individuals or companies in India.)
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The partnership with Google will help Wise and Western Union expand their presence in multiple markets and compete more aggressively with competitors like PayPal, which has wider reach (but is struggling to gain a foothold in India). Wise and Western Union assume liability and risk.
Nearly 250 million people around the world send over $ 500 billion in cross-border remittances annually, a Citi report said last month. But the room is ripe for disruption. “The fees are extremely high. It is embarrassing that we have not yet solved this problem,” wrote Citi analysts. The global average cost of sending money is 6.5%.
Western Union said in a statement that recipients pay no fees and receive the exact value in their local currency as selected by the US user. Wise said they will calculate the actual exchange rate and additional transfer fees that will be careful from the country to the country. (“The easiest way to find out how much it’s going to cost is to find a friend on Google Pay, choose Wise as your partner, tap” Pay, “and enter the amount you want to transfer,” it says .)
In either case, Google does not charge customers any additional fees. Through June 16, Western Union is offering unlimited free transfers when you send money with Google Pay, and Wise is offering new customers the first transfer for transfers up to $ 500 for free.
“The pandemic continues to have devastating effects on communities, customers and colleagues in many parts of Asia, particularly India and Latin America. This hands-on channel will help people support one another through these troubled times as they ponder how to pay and move money around the world, “Shelly Swanback, president of Western Union Product and Platform, said in a statement.
Tuesday’s announcement comes months after Google redesigned the GPay app in the US and advanced banking services with checking accounts from lenders like Citi.
